UNDERSTANDING THE PAWNSHOP BUSINESS

Once in a while, it is common to be caught up in a financial crunch. Under such circumstances, you may either have to sell some of your belonging, or to go for a quick loan from a pawn shop jewerly pawn shop. Customers prefer pawnshops because they are a quick and easy source of money. They are the last resort for people who may need a small loan. Before approaching a pawnshop for a loan, it is important to understand the business. In this article, I will discuss important things you need to know about the pawnshop business. It is a legal business with defined rules and regulations. 

About pawnshop 

It is a business that gives a loan for valuable items. Pawnbrokers make most of their income through interest on cash loans to customers for a valuable item. You leave your valuable items with the pawnbroker for an agreed-upon time until you repay the loan. If you repay the loan in time, you recover your item; otherwise, the broker keeps it for resale. The valuables that you leave with the broker are called the collateral. 

Items accepted by pawnbrokers 

Pawnshops accept jewelry, home audio equipment, video game systems, musical instruments, televisions, computers, cameras, gold/silver coins, phones, power tools, and other valuable items as collateral. Some well-established shops will accept cars and motorcycles. 

The pawning process 

The pawnbroker will examine and assess the item for its condition and marketability. He will exam it for any flaws, scratches, and damage. The shop owner will also determine the supply and demand of the item in the neighborhood. If the market floods with a particular item, he will only accept high-quality brands. The pawnbroker will either reject hard-to-sell items or offer a much lower price for them. After evaluation, the shop owner will give you what he feels your item is worth. The repayment duration ranges from 30 to 90 days but the shop owner can extend it at an extra cost. He writes the conditions on the pawn ticket given to you at the time of the contract.  

What if the items brought are stolen? 

The law protects both customers and the broker from dealing with stolen goods. It requires the broker to establish genuine identity through the photo in the driving license or a government-issued identity document. Some pawnshops give a list of all newly pawned goods to the police for them to determine if any of the items are stolen. 

Other operations of pawnshops 

Apart from lending money, pawnshops also sell new retail items. They also trade secondhand items or buy and sell them outright. Some shops offer cash advance services and cash on the spot for your post-dated cheques.  

Although these loans are quick and easy to obtain, they are relatively expensive and you risk losing your valuable item if you cannot repay. The shop usually offers below market rates for each item. If you decide to pawn your personal property, make sure you understand the transaction and legal obligations.